Correlation Between Valneva SE and Biora Therapeutics
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Biora Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Valneva SE and Biora Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valneva SE ADR and Biora Therapeutics, you can compare the effects of market volatilities on Valneva SE and Biora Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Valneva SE with a short position of Biora Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Biora Therapeutics.
Diversification Opportunities for Valneva SE and Biora Therapeutics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valneva and Biora is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Biora Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biora Therapeutics and Valneva SE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Valneva SE ADR are associated (or correlated) with Biora Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biora Therapeutics has no effect on the direction of Valneva SE i.e., Valneva SE and Biora Therapeutics go up and down completely randomly.
Pair Corralation between Valneva SE and Biora Therapeutics
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.49 times more return on investment than Biora Therapeutics. However, Valneva SE ADR is 2.05 times less risky than Biora Therapeutics. It trades about -0.62 of its potential returns per unit of risk. Biora Therapeutics is currently generating about -0.4 per unit of risk. If you would invest 599.00 in Valneva SE ADR on August 30, 2024 and sell it today you would lose (203.00) from holding Valneva SE ADR or give up 33.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Valneva SE ADR vs. Biora Therapeutics
Performance |
| Timeline |
| Valneva SE ADR |
| Biora Therapeutics |
Valneva SE and Biora Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Biora Therapeutics
The main advantage of trading using opposite Valneva SE and Biora Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Biora Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Biora Therapeutics will offset losses from the drop in Biora Therapeutics' long position.| Valneva SE vs. Ikena Oncology | Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. RenovoRx |
| Biora Therapeutics vs. Enveric Biosciences | Biora Therapeutics vs. Elevation Oncology | Biora Therapeutics vs. Hepion Pharmaceuticals | Biora Therapeutics vs. Zura Bio Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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